European Commission Fines Apple Over €1.8 Billion

The European Commission (EC) has fined Apple €1.8 billion for its practices related to music streaming apps distributed through its App store.

The EC found that Apple, who at the time fully controlled the App store and therefore set the terms and conditions for all apps available to iOS users, had placed restrictions on app developers that can be considered unfair trading conditions.

The investigation found Apple put restrictions in place banning app developers from informing users about alternative and at times cheaper subscriptions available outside the app. Apple also prevented developers from providing users with comparisons between in-app and other subscriptions and informing users that they can subscribe to offers outside the app.

The EC also claims App developers were banned from providing links to their websites and contacting any new users to provide more information on alternative streaming subscriptions.

This fine came just before the Digital Markets Act (DMA) went into effect, even though Apple had already announced a number of changes to comply with the regulation.

While the direct monetary harm was not evaluated as being significant, the EU defined the sum of €1.8 billion to ensure that the fine was a deterrent to Apple and other companies from repeating the same or similar behavior.

In response, Apple claims “developers compete on a level playing field on the App Store”, and that it fully intended to appeal the decision.

Apple claims that the fine was levied “despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.”

Apple put particular focus on Spotify, the company that submitted the original complaint in 2019, and that led to a formal investigation being opened by the EC in 2020.

Apple claims that Spotify, a European company, holds a dominant position in the music streaming business and yet pays Apple nothing. Apple’s position is that this decision favors Spotify and “cements the dominant position of a successful European company that is the digital music market’s runaway leader.”